Internal Revenue Bulletin: 2012-29
July 16, 2012
Final regulations under section 1502 of the Code provide for an election under which a consolidated group can avoid immediately taking into account an intercompany item after the liquidation of a target corporation. Pursuant to the election, the liquidation, followed by a recontribution of assets, will be recharacterized as a cross-chain reorganization, rather than a liquidation or an upstream reorganization followed by a drop of assets.
Proposed regulations under section 904(f)(3) of the Code provide proposed rules regarding the recapture of overall foreign losses on certain dispositions of property, as well as the coordination of the rules for determining high-taxed income under section 904(d) with section 904(b), (f) and (g).
This notice provides guidance under section 1297 of the Code regarding the treatment of income from certain government bonds held by certain active banks for purposes of determining whether a foreign corporation is a passive foreign investment company (PFIC).
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